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The term "Textile" is a Latin word originating from the word "texere" which means "to
weave". Textile refers to a flexible material comprising of a network of natural or artificial
fibres, known as yarn. Textiles are formed by weaving, knitting, crocheting, knotting and
pressing fibers together.
The history of textile is almost as old as that of human civilization and as time moves on the
history of textile has further enriched itself. In the 6th and 7th century BC, the oldest recorded
indication of using fiber comes with the invention of flax and wool fabric at the excavation of
Swiss lake inhabitants. In India the culture of silk was introduced in 400AD, while spinning
of cotton traces back to 3000BC. In China, the discovery and consequent development of
sericulture and spin silk methods got initiated at 2640 BC while in Egypt the art of spinning
linen and weaving developed in 3400 BC. The discovery of machines and their widespread
application in processing natural fibers was a direct outcome of the industrial revolution of
the 18th and 19th centuries. The discoveries of various synthetic fibers like nylon created a
wider market for textile products and gradually led to the invention of new and improved
sources of natural fiber. The development of transportation and communication facilities
facilitated the path of transaction of localized skills and textile art among various countries.
The textile industry is a group of related industries which uses a variety of natural fibers such
as cotton, kapok, fique, sisal, banana, agave, flax, jute, kenaf, hemp, ramie, rattan, vine, wool,
coir, asbestos, sheep's wool, cashmere goat hair, mohair goat hair, alpaca hair, horse hair, silk
etc. and/or synthetic fibres such as polyamide nylon, PET or PBT polyester, phenol-
formaldehyde (PF), polyvinyl alcohol fiber (PVA), polyvinyl chloride fiber (PVC),
polyolefins (PP and PE), acrylic polyesters, aramids, polyethylene (PE), Elastomers, spandex,
polyurethane etc.

Subdivision of the textile industry into its various components can be approached from
several angles. According to reference, the classical method of categorizing the industry
involves grouping the manufacturing plants according to the fibre being processed, that is,
cotton, wool, or synthetics. The modern approach to textile industry categorization, however,
involves grouping the manufacturing plants according to their particular operation such as
crocheting and pressing the fibers, spinning, weaving, knitting, knotting, apparel making, etc.
New innovations in clothing production, manufacture and design came during the Industrial
Revolution - these new wheels, looms, and spinning processes changed clothing manufacture
The rag trade, as it is referred to in the UK and Australia is the manufacture, trade and
distribution of textiles.
There were various stages - from a historical perspective - where the textile industry evolved
from being a domestic small-scale industry, to the status of supremacy it currently holds. The
cottage stage was the first stage in its history where textiles were produced on a domestic
During this period cloth was made from materials including wool, flax and cotton. The
material depended on the area where the cloth was being produced, and the time they were
being made.
In the later half of the medieval period in the northern parts of Europe, cotton came to be
regarded as an imported fiber. During the later phases of the 16th century cotton was grown
in the warmer climes of America and Asia. When the Romans ruled, wool, leather and linen
were the materials used for making clothing in Europe, while flax was the primary material
used in the northern parts of Europe.
During this era, excess cloth was bought by the merchants who visited various areas to
procure these left-over pieces. A variety of processes and innovations were implemented for
the purpose of making clothing during this time. These processes were dependent on the
material being used, but there were three basic steps commonly employed in making
clothing. These steps included preparing material fibers for the purpose of spinning, knitting
and weaving.

During the Industrial Revolution, new machines such as spinning wheels and handlooms
came into the picture. Making clothing material quickly became an organized industry - as
compared to the domesticated activity it had been associated with before. A number of new
innovations led to the industrialization of the textile industry in Great Britain. Clothing
manufactured during the Industrial Revolution formed a big part of the exports made by
Great Britain. They accounted for almost 25% of the total exports made at that time, doubling
in the period between 1701 and 1770.
The center of the cotton industry in Great Britain was Lancashire - and the amount exported
from 1701 to 1770 had grown ten times. However, wool was the major export item at this
point of time.
In the Industrial Revolution era, a lot of effort was made to increase the speed of the
production through inventions such as the flying shuttle in 1733, the flyer-and-bobbin system,
and the Roller Spinning machine by John Wyatt and Lewis Paul in 1738.
Lewis Paul later came up with the carding machine in 1748 and in 1764 the spinning jenny
was also developed. The water frame was invented in 1771 by Richard Arkwright. The power
loom was invented in 1784 by Edmund Cartwright.
In the initial phases, textile mills were located in and around the rivers since they were
powered by water wheels. After the steam engine was invented, the dependence on the rivers
ceased to a great extent. In the later phases of the 20th century, shuttles that were used in the
textile industry were developed and became faster and thus more efficient. This led to the
replacement of the older shuttles with the new ones.
Today, modern techniques, electronics and innovation have led to a competitive, low-priced
textile industry offering almost any type of cloth or design a person could desire. With its low
cost labour base, China has come to dominate the global textile industry.
For textiles, like for many other products, there are certain national and international
standards and regulations that need to be complied with to ensure quality, safety and

The following standards amongst others apply to textiles:
CPSIA, e.g. Standard for the Flammability of Clothing Textiles
ASTM Textile Standards
REACH Regulations for Textiles
China Product Standard for Textiles
Overall future growth expectations for the textile industry remain optimistic. As per the
survey, a significant proportion (40%) of the respondents expect the industry to witness
growth of 11-20% during FY13 and FY14. However, around 20% of the respondents expect
the industrys growth to record a decline during this period.

Figure no. 1.1Textile Industry growth prospects* (%)

*For FY13 and FY14
Source: D&B Study


Among the sample of companies surveyed, around 42% anticipate fluctuating raw material
prices and increasing market competition to be the major hindrances that could affect their
business during FY13 and FY14.

Figure no. 1.2 Major business concerns (%)

Source: D&B Study


According to the companies surveyed, favourable export markets would be a major growth
driver for the industrys growth during FY13 and FY14; around 45% of the respondents
confirm this.

Figure no. 1.3 Major growth drivers in the textile industry (%)

Source: D&B Study

The textile industry in India traditionally, after agriculture, is the only industry that has
generated huge employment for both skilled and unskilled labor in textiles. The textile
industry continues to be the second largest employment generating sector in India. It offers
direct employment to over 35 million in the country.
According to the Ministry of Textiles, the sector contributes about 14% to industrial
production, 4% to the country's gross domestic product (GDP) and 17% to the country's
export earnings. The share of textiles in total exports was 11.04% during April-July 2011, as
per the Ministry of Textiles. It is estimated that India would increase its textile and apparel
share in the world trade to 8% from the current level of 4.5% and reach US$80 billion by
2020. During 2009-2010, Indian textiles industry was pegged at US$55 billion, 64% of which
services domestic demand.

1. Cotton Textiles
2. Silk Textiles
3. Woollen Textiles
4. Readymade Garments
5. Hand-crafted Textiles
6. Jute and Coir
India is the second largest producer of fiber in the world and the major fiber produced is
cotton. Other fibers produced in India include silk, jute, wool, and man-made fibers. 60% of
the Indian textile Industry is cotton based.
The strong domestic demand and the revival of the Economic markets by 2010 have led to
huge growth of the Indian textile industry. In December 2011, the domestic cotton price was
up by 50% as compared to the December 2010 prices. The causes behind high cotton price
are due to the floods in Pakistan and China. India projected a high production of textile (325
lakhs bales for 2010 -11) .There has been increase in India's share of global textile trading to
seven percent in five years. The rising prices are the major concern of the domestic producers
of the country.
Man Made Fibers: These include manufacturing of clothes using fiber or filament synthetic
yarns. It is produced in the large power loom factories. They account for the largest sector of
the textile production in India. This sector has a share of 62% of the India's total production
and provides employment to about 4.8 million people.
The Cotton Sector: It is the second most developed sector in the Indian Textile industries. It
provides employment to huge amount of people but its productions and employment is
seasonal depending upon the seasonal nature of the production.
The Handloom Sector: It is well developed and is mainly dependent on the SHGs for their
funds. It market share is 13 % .of the total cloth produced in India.
The Woollen Sector: India is the 7th largest producer. Of the wool in the world. India also
produces 1.8% of the world's total wool.

The Jute Sector: The jute or the golden fiber in India is mainly produced in the Eastern
states of our country like Assam, West Bengal. Indian is 3rd largest producer of jute in the
The Sericulture and Silk Sector: India is the 2nd largest producer of silk in the world. India
produces world's 18% total silk. Mulberry, Eri, Tasar, and Muga are the 3 main types of the
silk produced in the country. It is a labor-intensive sector.

The Government of India has promoted a number of export promotion policies for the Textile
sector in the Union Budget 2011-12 and the Foreign Trade Policy 2009-14. This also includes
the various incentives under Focus Market Scheme and Focus Product Scheme, broad basing
the coverage of Market Linked Focus Product Scheme for textile products and extension of
Market Linked Focus Product Scheme etc. to increase the Indian shares in the global trade of
textiles and clothing. The various schemes and promotions by the Government of India are as
follows -
The e-marketing platforms have been developed by the Central Cottage Industries
Corporation of India (CCIC), and the Handicrafts and Handlooms Export Corporation of
India (HHEC).
Skill Development:
Scheme on Integrated Skill Development Scheme targets to train approximately 26.75 lakh
people over a period of 5 years (2.70 lakh people in the first two years); cover all segments
under the ambit of the Ministry including: textiles and apparel; handicrafts; handlooms; jute;
and sericulture. A scheme has been proposed for implementation under the12th FYP with an
allocation of RS3500crore. A target of 1.5 lakh workers would be achieved by March 2012
Credit Linkages: 25,000 Artisan Credit Cards have been issued to artisans under the Credit
Guarantee Scheme, and over 1.65 lakh additional applications have been forwarded to banks
for consideration.

Textiles Parks:
The Indian Government has given approval to 21 new Textiles Parks to be set up and this
would be executed over a period of 36 months. The new Textiles Parks would leverage
employment to 400,000 textiles workers. The product mix in these parks would include
apparels and garments parks, hosiery parks, silk parks, processing parks, technical textiles
including medical textiles, carpet and power loom parks.

Second largest textile producer in the
world. Long and deep rooted textile
tradition and highest net forex earner
for the country
Integrated industry across the entire
chain from fiber to garments/home
textiles i.e. concept to consumer
Abundant skilled and technical labor
force, which are especially suited for
apparels/ Made Ups manufacturing.
Large and growing domestic market to
impart stability to export thrust
Strong entrepreneurial class
Flexibility in production of small order
Small size and technological outdated
plants result in lack of economics of
scale, low productivity and weak
quality control
Poor work practices resulting in higher
labor cost component in many staple
garment, in spite of low labor costs
With the exception of spinning, other
sectors are fragmented
Poor quality in weaving and processing
mainly due to domination of
unorganized sector
Rigid government labor laws and
policies lack reforms
High transaction & power cost


Panipat is today world-famous for its beautiful and jubilant handloom made-ups, blankets and
other upholstery. This new fame seems to have superceded the nostalgia of the three
historical battles of Panipat. Some important features of the textile industry of Panipat are:
1. There is hardly any city of this small size in India that has such a big textile
manufacturing base.

2. This Industry comprises of seven segments that is handloom, woollen carpets, shoddy
yarn spinning, open end cotton yarn spinning, power-loom industry, wet processing
and hosiery woollen yarn industry. All of these together makes a business of around
Rs 4000 crores and provide employment to 2 lacs people.

3. It contributes 50% of the total exports of the Handloom products from the country.

4. Panipat town has got a global distinction of having the maximum number of shoddy
spinning units at one particular place.

5. Panipat has been awarded Gold Trophy by the Export Promotion Council for the
highest quantity of exports in woollen hand tufted carpets.

6. The industry of Panipat is meeting out 75% demand of Barrack Blankets for the
Indian Military.

In the nutshell, Panipat is an industry with a wide range of handloom textiles, whether
requiredfor a five star hotel or for a poor man's cottage. However, Panipat is not an exception
caseduring these days of overall industry recession. The industries of Panipat are seriously
suffering from low capacity utilization, credit problems, less margins, labour problems,
overseas competition and changing preferences of consumers, which is resulting in shut down
of most of the small scale manufacturing units. In view of above there is an urgent need for a
need based, flexible, focused and action oriented policies targeted at sustained development
of the industry and economy.

Sheena Exports
Om Overseas
Gaba Overseas
Paliwal Exports
Ess Kay Enterprise
Shri Krishna Furnishing
Shiv Shakti Exports


REED & PICK IMPEX PVT. LTD. is undoubtly one of the leading manufacture exporters of
home furnishing textiles based in well known industrial city in Panipat in Northern India. The
Company operates as rugs Export Company of REED & PICK IMPEX PVT. LTD. group
and perhaps the only organization that has implemented and maintained the modern day
practices of professionalism in term of management while keeping the hiccups of
unorganized manufacturing industry apart from our clients. As an outcome, our clients are
enjoying the artistic and traditional Indian flavours of home furnishing trends with finest
quality and efficient services like timely deliveries, quality assurance and lot more. With an
experience of around 40 years in the textile industry and our expertise in extensive textile
products, we are set to offer our clients unmatchable quality and exclusive designs.
The Company manufactures a wide range of home furnishing textile products like face to
face machine woven cotton bath mats and carpets, table linen, bed linen (Tapestry, Damask,
Velvet, Prints), bags throws, rugs, kitchen linen, curtains (cotton, polyester, voile, organza
and velvet).
The Company currently exports wide range of home Furnishing Textiles to various countries
such as France, Germany, South Africa, USA, and Dubai etc. It continues to broaden the
reach to include additional designs and range in the portfolio, while expanding to new
markets overseas.
Quality has always been the key factor for us since our establishment. The company meets
various quality standards and complies with the norms of ILO (Indian Labor Organization).
REED & PICK IMPEX PVT. LTD. is one of the largest manufacturers & exporters of home
furnishings, carpets and floor coverings in India. The Company counts among their clientele
some of the most reputed stores and catalog companies of the world.
The Companys in-house design studio is reputed for its superior quality of designs and
innovative products. The Company is renowned for its exclusive theme-based collections that
reflect the moods of various seasons.

The Company is also renowned for creating custom-made products to suit the taste of
aesthetics from across countries. REED & PICK IMPEX PVT. LTD. is run by highly
experienced professionals who have in-depth knowledge in carpet designing, manufacturing
and raw materials.
REED & PICK IMPEX PVT. LTD. has built up an international reputation in Home
Furnishings on the basis of our superior quality products and timely delivery.
The company is a recognized export houses since 1973 and also an ISO 9001:2008 and
14001 certified. The company is mainly manufacturing and exporting textile products
They are mainly producing:
Decorative Cushions and Throws
Bath Rugs and Shower Curtains
Braid and Woven Rugs
Tufted Bedding and Curtains
Quilts and Comforters
Table Linen
Kitchen Linen
Bed Linen
Bags and Recycled Products.
The main clients of the company are KOHLS, K-MART, TARGET, HOMESTEAD, WAL-
MART etc. For the export performance, the company was awarded by the President of India
and the export promotion council.

The main motto of the company is to attain 100% in time shipments of its products. Well
trained managerial professionals and designers are involved in the managerial and product
The compliance activities of the company are well integrated as per domestic and abroad
norms. Workers welfare is the prime attention towards workers of the company by serving
medical aid and the other educational facilities.
In house manufacturing facilities are the most important peculiarity such as weaving,
stitching, embroidery, braiding, tufting, dye, made ups, cotton blankets and bags- these
activities are being organized in one hut. The Company has approximately 250 full time
employees and some other employees who are working in the Company on contractual basis.
Production Strength and Sophisticated Machineries
Vertically Integrated Facilities and Infrastructure
Qualified Design and Development Team
Gretagmacbeth Spectra light lll Color Viewing Booth
Gretagmacbeth Spectrophotometer for Recipe and Delta
Large Base of LOOMS FOR RUGS, Tufting and Fabrication
Own Container Transportation for Critical Shipments.
125 Braiding Machines for Braid Rugs and Place Mats.
100 Candle Wick Tufting machines for bedding and rugs.
250 Multi Needle tufting machines for bath rugs.
20 Power Looms for Ribbed Place Mats with Dobby.
100 Power Looms with Dobby and Jacquards.
10 wide-widths (340cm) computerize shuttle less looms.
200 Juki Sewing machines.
50 Pit Looms for Woven Rugs.

100 Embroidery Machines.
Blow fills for Pillows and Cushions.
State of Art Dyeing in- house for overall dyeing.
500 loom of various types.
Cutting, sewing and tufting equipment for State-of-the-art fabrication.
Captive transportation to counter occasional bottlenecks on timely delivery.
Permanent workforce of 1500 loyal and skilled craftsmen only adult workers.
P plant with O discharge option.
Apart from the above facilities, the Company is depending on outsourced facilities like
Printing, Computerized Embroidery, Quilting of some type of specialized products etc.
The Companys main unit is located in the reputed industrial sector of Panipat city, also
called as city of Handlooms in Northern India. The city is just 90 kms. from the capital city
and well connected to national highway. The industrial background of Panipat city provides
us with all the nut and bolts of textile business to flourish. Being recognized textile hub the
city has a flow of skilled labors from all parts of country.
The manufacturing unit is spread over a large area of land that provides enough space for the
workers to work in healthy and well ventilated environment. The campus is divided into
different work areas sheds, storage rooms or god owns, labor rooms, finishing departments,
packaging department and finally a well organized managerial department.
Technically qualified and committed professionals meticulously plan in advance to honour
global commitments of quality. The Companys in-house production units ensure timely
deliveries under strict quality norms. It is having a well developed and systematic production
unit. It is divided into different sections and supervised by well trained staff.

To establish itself as a valuable brand into domestic market.
A credible presences in organize detail segment through setting up retail change store.
Relationship with at least 10 retailers out of top 20 in the world.
REED & PICK IMPEX PVT. LTD. is an export house company, with a focus on delivering
the highest quality services. The team pushes the limits so their clients benefit. Always
looking forward, the company is committed to fostering and developing successful business
With a commitment to excellence and paying sharp attention to the quality of work and
services, perfectionism is their only acceptable standard. The company forms partnerships
with the best companies-those who are equally passionate about supporting businesses in
their rapidly expanding technological world.
Quality Policy
REED & PICK IMPEX PVT. LTD. is committed to the manufacture and supply of the
highest quality products. Our objective is to meet or exceed customer requirements on time
every time, and strive towards a continuous improvement in the effectiveness of the
established Quality Management System.


Figure No. 1.4 Manufacturing Process

The Companys processes are designed to maximize product appeal, ensure quality, minimize
cost and eliminate duplication of packaging cost and effort.
1. Product Appeal is maximized by optimal exploitation of REED & PICK IMPEX
PVT. LTD. s design and sampling skills to develop buyers programs. In addition, our
own innovative trendy designs are always available on tap.
2. Quality is assured- starting with yarn purchase and each processing stage thereafter.
Correct attitude, appropriate training and vigilance delivers promised quality
3. Buyer pre-shipment inspection welcomed.
4. Cost is lowest at REED & PICK IMPEX PVT. LTD. because of procedures resulting
in quality production without wastage, strong yarn buying power, captive
manufacturing and long term perspective.
5. Packaging is done to buyer specifications, with Bar Coding, instruction inserts etc.,
ready for retail shelf.

CONCLUSION :- In the above point of view, I liked overall company atmosphere by way of
functioning, working atmosphere of men and women and their welfare facilities and other
compliance activities are excellent.

Cotton Furnishings created at REED & PICK IMPEX PVT. LTD. are renowned for their
quality and style all over the world. REED & PICK IMPEX PVT. LTD. translates seasonal
trends and designs, as conceived by the buyers, into their coordinated programs for home
furnishings that offer unique lifestyles. Also designs are created and offered by REED &
PICK IMPEX PVT. LTD. s design team.
Through the Companys own manufacturing facilities, REED & PICK IMPEX PVT. LTD.
produces a wide range of Home Furnishings like rugs, table linen, cushion covers, bed linen,
kitchen linen, bathroom linen, curtains, cotton blankets, knits and throws.
Cotton Home Furnishings made at REED & PICK IMPEX PVT. LTD. brighten the modern
lifestyles and add beauty to homes across the nations. They are preferred by leading stores,
around the globe.
Figure No. 1.5 Product Portfolio

1. Bed linen
In terms of value, this is certainly the most important market for household
textiles.Functions of bed linen are to protect the bedding, to enhance sleeping pleasure
and an aesthetic appeal. The most important development concerning bedroom linen in
recent decades has been the introduction of the eiderdown also referred to as duvet, or
quilt (together with the quilt cover).The quilt cover has much more potential for fashion
expression than sheets. Types of bed linen:
Flat (non-raised) bed line.
Terry bed line
Jersey bed line
Flannelette (flannel)

2. Bathroom linen
The major bathroom textile product is a terry towel: traditional towels, bath and beach
towels and guest towels. The most important differences are based on end-use which
dictates the different sizes. Other bath products are washing gloves, bath rugs and bath
mats besides shower curtains.
3. Kitchen linen
A decrease in the use of tea towels has been greatly influenced by the fact that
increasingly more households are using automatic dishwashers, so that hand drying is
no longer necessary. In the kitchen, two types of towels are used:
Kitchen towels, made of terry or flat woven;
Dish towels or tea towels, only flat woven;
Aprons and other accessories only flat woven.

4. Table linen
Table linen includes:-tablecloths, table covers, table centers, table runners and napkins.
The tablecloth has two functions: protection of the table and decoration (aesthetic
appeal).This market is not at all large. It is difficult to get hold of accurate figures on table
napkins separately, as they are almost always sold in a set matching the tablecloth,
particularly in the case of expensive quality. There is an enormous offer as to types,
forms, materials, colors and designs. Materials can be flat, structured, printed dobby,
jacquard, embroidered, damask with all kind of adornments and decorations. Table linen
is mostly made of cotton, material other than cotton, are 100% polyester (easy to launder)
and 50% polyester/505 cotton or viscose and the more luxurious textile fibers such as
5. Curtains
Curtains are used to provide privacy, eliminate (sun) light, insulation purposes (thermal,
acoustic), aesthetic effects etc.
Textiles for indoor window covering can be divided into the following categories:
Draperies are generally made of heavy fabrics, such as velvet, satin, opaque and jacquard.
They usually have a lining and are hung from hooks.
Curtains are relatively sheer and lightweight and are in most cases hung without
Lace or net curtains adorn the window frames in houses. The major fiber used for net
curtains is polyester filament. Other fibers are polyester staple and acrylic staple.
Shades are soft coverings, take less space than curtain and draperies and come in
fabric and a variety of other materials.
Curtains are largely sold ready-made in lengths which fit the standard window sizes and
several heights. Curtains and draperies are made from all types of fibers and fabric
construction; however, most curtains are made with synthetic fibers.

Cushion covers can be developed on individual designs or could be supportive to a
coordinating story, adding the accent to any living place. It is one of the most versatile
engineered products providing immense scope to working on designs in creative and
innovative ways and enabling us to offer a large range of prices.
Throws has been one of the strongest areas of REED & PICK IMPEX PVT. LTD. .
Various qualities and counts of yarn are used with interesting weaving techniques on in-
house Dobby and Jacquard facilities. REED & PICK IMPEX PVT. LTD. actively
pursues to develop throws of latest and trendy designs in various price ranges, from very
economical to highly sophisticated masterpieces in quantity.
Home Furnishings created directly by REED & PICK IMPEX PVT. LTD. or coordinated by
wholesalers / importers like Banana Republic (GAP), occupy prominent shelf space of major
retail chains like:

Calvin Klein Home
Crate & Barrel
J.C. Penny
Martha Stewart
New Port News Inc.
Pottery Barn
Tommy Hilfiger

1. Introduction :

For India to become a major player in world trade, an all encompassing, comprehensive
view needs to be taken for the overall development of the countrys foreign trade. While
increase in exports is of vital importance, we have also to facilitate those imports which are
required to stimulate our economy. Coherence and consistency among trade and other
economic policies is important for maximizing the contribution of such policies to
development. Thus, while incorporating the existing practice of enunciating an annual Exim
Policy, it is necessary to go much beyond and take an integrated approach to the
developmental requirements of Indias Foreign trade. The Government of India, Ministry of
Commerce and Industry announces Export Import Policy after every five years. EXIM
policy, in general, aims at developing export potential, improving export performance,
encouraging foreign trade and creating favorable balance of payments position. The current
Exim Policy covers the period 2004-2009. The Export Import Policy (EXIM Policy) is
updated every year on the 31st of March and the modifications, improvements and new
schemes becomes effective from 1st April of every year.

2. General Objectives of Exim Policy :

1. To establish the framework for globalization.
2. To promote the productivity competitiveness of Indian Industry.
3. To Encourage the attainment of high and internationally accepted standards
of quality.
4. To augment export by facilitating access to raw material,intermediate,
components, consumables and capital goods from the international market.
5. To promote internationally competitive import substitution and self-reliance..

3. Objectives Of EXIM policy ( 2008 2009) :

Trade is not an end in itself, but a means to economic growth and national development. The
primary purpose is not the mere earning of foreign exchange, but the stimulation of greater
economic activity.

The Foreign Trade Policy is rooted in this belief and built around two major
objectives. These are:
1. To double our percentage share of global merchandise trade within the next five years; and
2. To act as an effective instrument of economic growth by giving a thrust to employment

4. Strategy :
These objectives are proposed to be achieved by adopting, among others, the following

1. Unshackling of controls and creating an atmosphere of trust and transparency to unleash
the innate entrepreneurship of our businessmen, industrialists and traders

2. Simplifying procedures and bringing down transaction costs.

3. Neutralizing incidence of all levies and duties on inputs used in export products, based on
the fundamental principle that duties and levies should not be exported

4. Facilitating development of India as a global hub for manufacturing, trading and services.

5. Identifying and nurturing special focus areas which would generate additional employment
opportunities, particularly in semi-urban and rural areas, and developing a series of
Initiatives for each of these

6. Facilitating technological and infrastructural up gradation of all the sectors of the Indian
economy, especially through import of capital goods and equipment, thereby increasing value
addition and productivity, while attaining internationally accepted standards of quality.

7. Avoiding inverted duty structures and ensuring that our domestic sectors are not
disadvantaged in the Free Trade Agreements/Regional Trade Agreements/Preferential Trade
Agreements that we enter into in order to enhance our exports
8. Upgrading our infrastructural network, both physical and virtual, related to
the entire Foreign Trade chain, to international standards.

9. Revitalizing the Board of Trade by redefining its role, giving it due recognition and
inducting experts on Trade Policy.

10. Activating our Embassies as key players in our export strategy and linking
our Commercial Wings abroad through an electronic platform for real time trade intelligence
and enquiry dissemination.

5. Main Annual Supplement Highlights (2008 09) :
1. DEPB scheme has been extended till May 2009.
2. Refund of service tax on almost all the services.
3. Income tax benefit to 100% EOUs has been extended by Government.
4. Coverage of FMS has been increased and additional 10 countries have beens
included. These are Mongolia, Bosnia-Herzegovina, Albania, Macedonia, Croatia, Honduras,
Djibouti, Sudan, Ghana and Colombia.
5. Split-up facility under DFIA Scheme introduced.
6. Duty free import of samples has been increased from Rs.75, 000 to Rs.1,00,000.
7. Value of jeweler parcels, through Foreign Post Office is raised to US$ 75,000. Earlier it
was from US$ 50,000.
8. EOUs shall be allowed to pay excise duty on monthly basis, instead of the
present system of paying duty on consignment basis.
9. Customs duty payable under EPCG Scheme has been reduced from 5% to 3%.

6. Some Other Highlights of The EXIM Policy :
1. Inter State Trade Council :
To engage the State Government inproviding an enabling environment for boosting
international trade, by setting up an Inter State Trade Council.

2. Removal of Export Cess :
Proposed to abolish cess on export of all agricultural and plantation commodities levied
under various commodity Board Acts.

3. Export Promotion Capital Goods Scheme (EPCG) :
This scheme is extended to Agricultural sector, SSI sector, Retail Sectors in
order to promote exports from them.

4. Service Export :
To upgrade infrastructure in the service related companies.

5. Agri Export :
Benefits under Vishesh Krishi Upaj Yojana have been extended to exports of
poultry and dairy products in addition to export of flowers, fruits, vegetables and their value
added products.

6. Package for Marine Sector :
Duty free import of specified specialized chemicals and flavoring oils as per a
defined list shall be allowed to the extent of 1% of FOB value of preceding
financial years export.

7. Advance Licensing Scheme :
The Scope of Advance License for annual requirement has been extended to all
categories of exporters having past export performance.

8. Duty Free Replenishment Certificate :
Brass scrap, Additives, paper board, and dye stuff have been removed from the

list of items prescribed for import under DFRC.

9. Procedural Simplification :
Proposed to simplify procedures and reduce the documentation requirements so as to reduce
the transaction cost of the exporters and thereby increase their competitiveness

10. EDI Initiatives :
DGFT shall introduce an automated electronic system for filing, retrieval and authentication
of documents based on agreed protocols and message exchange with other authorities such
including Customs and banks.

7. Implications of The Foreign Trade (2004-09):
1. Implications on Indian Economy:
This policy propose to simplify procedures and develop technology and infrastructure.

2. Implications on Agriculture :
Special Agricultural Produce Scheme has been introduced for promoting the export of
fruits, vegetables, flowers, and their value added products.

3. Implications on Handlooms and Handicraft:
Establishment of Handicraft SEZ and Handicraft Export Promotion Council would promote
development of Handloom and Handicraft Industry.

4. Implications on Gem and Jewellery Sector :
This is special thrust area in this policy. Duty free imports of other inputs would give a
further boostto this sector.

5. Implications on Leather and Footwear Industry :
Duty free import as a specified percentage of exports. Exemption on customs duty on
equipment for effluent treatment plants would help promoting export form this sector.

6. Implications on Service Industry :
An exclusive service promotion council has been set up in order to map the
opportunities for key services in key market.

8. Negative List of Exports :
The negative list consists of goods, the import or export of which is ether prohibited,
restricted through licensing or otherwise to be canalized through a designate government
The negative list of exports, as per the EXIM Policy
1. Prohibited Items : Which items completely banned from the exports.
All forms of wild animals including their parts and products.
Special Chemicals as notified by the DGFT.
Exotic birds as notified by the DGFT.
Sea Shells, as specified
Human Skeleton.
Peacock Tail
Red sanders wood in any form.

2. Restricted Items :which items allowed for exports under special license issued by the
Dress materials, ready-made garments, fabrics or textile items with
imprints of excerpts or verses of the Holy Quran.
Horses Kathiawadi, Marwari, and Manipuri breeds.
Fresh and frozen silver prom frets of weight less than 300gm.
Paddy (Rice in husk).
Seaweeds of all types.
Chemical Fertilizer all types


The UPA Government has assumed office at a challenging time when the entire world is
facing an unprecedented economic slow-down. The year 2009 is witnessing one of the most
severe global recessions in the post-war period. Countries across the world have been
affected in varying degrees and all major economic indicators of industrial production, trade,
capital flows, unemployment, per capita investment and consumption have taken a hit. The
WTO estimates project a grim forecast that global trade is likely to decline by 9% in volume
terms and the IMF estimates project a decline of over 11%. The recessionary trend has huge
social implications. The World Bank estimate suggests that 53 million more people would
fall into the poverty net this year and over a billion people would go chronically hungry.
Though India has not been affected to the same extent as other economies of the
world, yet our exports have suffered a decline in the last 10 months due to a contraction in
demand in the traditional markets of our exports. The protectionist measures being adopted
by some of these countries have aggravated the problem. After four clear quarters of
recession there is some sign of a turnaround and the emergence of green shoots, though I
would be hesitant to hazard a guess on the nature and extent of this recovery and the time the
major economies will take to return to their pre-recession growth levels. Announcing a
Foreign Trade Policy in this economic climate is indeed a daunting task. We cannot remain
oblivious to declining demand in the developed world and we need to set in motion strategies
and policy measures which will catalyse the growth of exports.Before defining the objectives
of the new policy it would be useful to take stock of our achievements in the foreign
tradeover the last 5 years. The foreign trade policy announced by the UPA Government in
2004 had set two objectives, namely,
(i) to double our percentage share of global merchandize trade within 5 years and (ii) use
trade expansion as an effective instrument of economic growth and employment generation.
Looking back, we can say with satisfaction that the UPA Government has delivered
on its promise. Agriculture and industry has shown remarkable resilience and dynamism in
contributing to a healthy growth in exports. In the last five years our exports witnessed robust
growth to reach a level of US$ 168 billion in 2008-09 from US$ 63 billion in 2003-04. Our
share of global merchandise trade was 0.83% in 2003; it rose to 1.45% in 2008 as per WTO
estimates. Our share of global commercial services export was 1.4% in 2003; it rose to 2.8%
in 2008. Indias total share in goods and services trade was 0.92% in 2003; it increased to

1.64% in 2008. On the employment front, studies have suggested thatnearly 14 million jobs
were created directly or indirectly as a result of augmented exports in the last five years.
The short term objective of our policy is to arrest and reverse the declining trend of exports
and to provide additional support especially to those sectors which have been hit badly by
recession in the developed world. We would like to set a policy objective of achieving an
annual export growth of 15% with an annual export target of US$ 200 billion by March 2011.
In the remaining three years of this Foreign Trade Policy i.e. upto 2014, the country
should be able to come back on the high export growth path of around 25% per annum. By
2014, we expect to double Indias exports of goods and services. The long term policy
objective for the Government is to double Indias share in global trade by 2020. In order to
meet these objectives, the Government would follow a mix of policy measures including
fiscal incentives, institutional changes, procedural rationalization, enhanced market access
across the world and diversification of export markets. Improvement in infrastructure related
to exports; bringing down transaction costs, and providing full refund of all indirect taxes and
levies, would be the three pillars, which will support us to achieve this target. Endeavour will
be made to see that the Goods and Services Tax rebates all indirect taxes and levies on
exports. At this juncture, it is our endeavour to provide adequate confidence to our exporters
to maintain their market presence even in a period of stress. A Special thrust needs to be
provided to employment intensive sectors which have witnessed job losses in the wake of this
recession, especially in the fields of textile, leather, handicrafts, etc. We want to provide a
stable policy environment conducive for foreign trade and we have decided to continue with
the DEPB Scheme upto December 2010 and income tax benefits under Section 10(A) for IT
industry and under Section 10(B) for 100% export oriented units for one additional year till
31st March 2011.
Enhanced insurance coverage and exposure for exports through ECGC Schemes has
been ensured till 31
March 2010. We have also taken a view to continue with the interest
subvention scheme for this purpose. We need to encourage value addition in our
manufactured exports and towards this end, have stipulated a minimum 15% value addition
on imported inputs under advance authorization scheme. It is important to take an initiative to
diversify our export markets and offset the inherent disadvantage for our exporters in
emerging markets of Africa, Latin America, Oceania and CIS countries such as credit risks,
higher trade costs etc., through appropriate policy instruments. We have endeavored to
diversify products and markets through rationalization of incentive schemes including the
enhancement of incentive rates which have been based on the perceived long term

competitive advantage of India in a particular product group and market. New emerging
markets have been given a special focus to enable competitive exports. This would of course
be contingent upon availability of adequate exportable surplus for a particular product.
Additional resources have been made available under the Market Development Assistance
Scheme and Market Access Initiative Scheme. Incentive schemes are being rationalized to
identify leading products which would catalyze the next phase of export growth. As part of
our policy of market expansion, we have signed a Comprehensive Economic Partnership
Agreement with South Korea which will give enhanced market access to Indian exports.
We have also signed a Trade in Goods Agreement with ASEAN which will come in
force from January 01, 2010, and will give enhanced market access to several items of Indian
exports. These trade agreements are in line with Indias Look East Policy. We have also
concluded the Mercosur Preferential Trade Agreement. It shall be our endeavour to deepen
our trade engagement with other major economic groupings in the world. The Government
seeks to promote Brand India through six or more Made in India shows to be organized
across the world every year. In the era of global competitiveness, there is an imperative need
for Indian exporters to upgrade their technology and reduce their costs. Accordingly, an
important element of the Foreign Trade Policy is to help exporters for technological
upgradation. Technological upgradation of exports is sought to be achieved by promoting
imports of capital goods for certain sectors under EPCG at zero percent duty. Under the
present Foreign Trade Policy, Government recognizes exporters based on their export
performance and they are called status holders. For technological upgradation of the export
sector, these status holders will be permitted to import capital goods duty free (through Duty
Credit Scrips equivalent to 1% of their FOB value of exports in the previous year), of
specified product groups. This will help them to upgrade their technology and reduce cost of
For upgradation of export sector infrastructure, Towns of Export Excellence and
units located therein would be granted additional focused support and incentives. The policy
is committed to support the growth of project exports. A high level coordination committee is
being established in the Department of Commerce to facilitate the export of manufactured
goods / project exports creating synergies in the line of credit extended through EXIM Bank
for new and emerging markets. This committee would have representation from the Ministry
of External Affairs, Department of Economic Affairs, EXIM Bank and the Reserve Bank of
India. We would like to encourage production and export of green products through
measures such as phased manufacturing programme for green vehicles, zero duty EPCG

scheme and incentives for exports. To enable support to Indian industry and exporters,
especially the MSMEs, in availing their rights through trade remedy instruments under the
WTO framework, we propose to set up a Directorate of Trade Remedy Measures. In order to
reduce the transaction cost and institutional bottlenecks, the e-trade project would be
implemented in a time bound manner to bring all stake holders on a common platform.
Additional ports/locations would be enabled on the Electronic Data Interchange over the next
few years. An Inter- Ministerial Committee has been established to serve as a single
window mechanism for resolution of trade related grievances. These are difficult times and
we have set an ambitious goal for ourselves. I am sure that the industry and the Government,
working in tandem, will be able to ensure that the Indian exports become globally
competitive and that we are able to achieve the target, which we have set for ourselves.

Higher Support for Market and Product Diversification
1. Incentive schemes under Chapter 3 have been expanded by way of addition of new
products and markets.
2. 26 new markets have been added under Focus Market Scheme. These include 16 new
markets in Latin America and 10 in Asia-Oceania.
3. The incentive available under Focus Market Scheme(FMS) has been raised from 2.5% to
4. The incentive available under Focus Product Scheme(FPS) has been raised from 1.25% to
5. A large number of products from various sectors havebeen included for benefits under
FPS. These include, Engineering products (agricultural machinery, parts of trailers, sewing
machines, hand tools, garden tools, musical instruments, clocks and watches, railway
locomotives etc.), Plastic (value added products), Jute and Sisal products, Technical Textiles,
Green Technology products (wind mills, wind turbines, electric operated vehicles etc.),
Project goods, vegetable textiles andcertain Electronic items.
6. Market Linked Focus Product Scheme (MLFPS) hasbeen greatly expanded by inclusion of
products classified under as many as 153 ITC(HS) Codes at 4 digit level. Some major
products include; Pharmaceuticals, Synthetic textile fabrics, value added rubber products,
value added plastic goods, textile madeups, knitted and crocheted fabrics, glass products,
certain iron and steel products and certain articles of aluminium among others. Benefits to
these products will be provided, if exports are made to 13 identified markets (Algeria, Egypt,

Kenya, Nigeria,South Africa, Tanzania, Brazil, Mexico, Ukraine, Vietnam, Cambodia,
Australia and New Zealand).
7. MLFPS benefits also extended for export to additional new markets for certain products.
These products include auto components, motor cars, bicycle and its parts, and apparels
among others.
8. A common simplified application form has been introduced for taking benefits under FPS,
9. Higher allocation for Market Development Assistance (MDA) and Market Access
Initiative (MAI) schemes is being provided.

Technological Upgradation
10. To aid technological upgradation of our export sector, EPCG Scheme at Zero Duty has
been introduced. This Scheme will be available for engineering & electronic products, basic
chemicals & pharmaceuticals, apparels & textiles, plastics, handicrafts, chemicals & allied
products and leather & leather products (subject to exclusions of current beneficiaries under
Technological Upgradation 10 Fund Schemes (TUFS), administered by Ministry of Textiles
and beneficiaries of Status Holder Incentive Scheme in that particular year). The scheme shall
be in operation till 31.3.2011.
11. Jaipur, Srinagar and Anantnag have been recognised as Towns of Export Excellence for
handicrafts; Kanpur, Dewas and Ambur have been recognised as Towns of Export
Excellence for leather products; and Malihabad for horticultural products.

EPCG Scheme Relaxations
12. To increase the life of existing plant and machinery, export obligation on import of
spares, moulds etc. Under EPCG Scheme has been reduced to 50% of the normal
specific export obligation.
13. Taking into account the decline in exports, the facility of Re-fixation of Annual Average
Export Obligation for a particular financial year in which there is decline in exports from the
country, has been extended for the 5 year Policy period 2009-14.

Support for Green products and products from North-East
14. Focus Product Scheme benefit extended for export of green products; and for exports of
some products originating from the North East.

Status Holders
15. To accelerate exports and encourage technological 11 upgradation, additional Duty Credit
Scrips shall be given to Status Holders @ 1% of the FOB value of past exports. The duty
credit scrips can be used for procurement of capital goods with Actual User condition. This
facility shall be available for sectors of leather (excluding finished leather), textiles and jute,
handicrafts, engineering (excluding Iron & steel & non-ferrous metals in primary and
intermediate form, automobiles & two wheelers, nuclear reactors & parts, and ships, boats
and floating structures), plastics and basic chemicals (excluding pharma products) [subject to
exclusions of current beneficiaries under Technological Upgradation Fund Schemes (TUFS)].
This facility shall be available upto 31.3.2011.
16. Transferability for the Duty Credit scrips being issued to Status Holders under paragraph
3.8.6 of FTP under VKGUY Scheme has been permitted. This is subject to the condition that
transfer would be only to Status Holders and Scrips would be utilized for the procurement of
Cold Chain equipment(s) only.

Stability/ continuity of the Foreign Trade Policy
17. To impart stability to the Policy regime, Duty Entitlement Passbook (DEPB) Scheme is
extended beyond 31-12- 2009 till 31.12.2010.
18. Interest subvention of 2% for pre-shipment credit for 7 specified sectors has been
extended till 31.3.2010 in the Budget 2009-10.
19. Income Tax exemption to 100% EOUs and to STPI units under Section 10B and 10A of
Income Tax Act, has been 12 extended for the financial year 2010-11 in the Budget2009-10.
20 The adjustment assistance scheme initiated in December,2008 to provide enhanced ECGC
cover at 95%, to the adversely affected sectors, is continued till March, 2010.

Marine sector
21. Fisheries have been included in the sectors which are exempted from maintenance of
average EO under EPCG Scheme, subject to the condition that Fishing Trawlers, boats, ships
and other similar items shall not be allowed to be imported under this provision. This would
provide a fillip to the marine sector which has been affected by the present downturn in
22. Additional flexibility under Target Plus Scheme (TPS) / Duty Free Certificate of
Entitlement (DFCE) Scheme for Status Holders has been given to Marine sector.

Gems & Jewellery Sector
23. To neutralize duty incidence on gold Jewellery exports, it has now been decided to allow
Duty Drawback on such exports.
24. In an endeavour to make India a diamond international trading hub, it is planned to
establish Diamond Bourse (s).
25. A new facility to allow import on consignment basis of cut & polished diamonds for the
purpose of grading/ certification purposes has been introduced.
26. To promote export of Gems & Jewellery products, the 13 value limits of personal carriage
have been increased from US$ 2 million to US$ 5 million in case of participation in overseas
exhibitions. The limit in case of personal carriage, as samples, for export promotion tours, has
also been increased from US$ 0.1 million to US$ 1 million.

Agriculture Sector
27. To reduce transaction and handling costs, a single window system to facilitate export of
perishable agricultural produce has been introduced. The system will involve creation of
multi-functional nodal agencies to be accredited by APEDA.

Leather Sector
28. Leather sector shall be allowed re-export of unsold imported raw hides and skins and
semi finished leather from public bonded ware houses, subject to payment of 50% of the
applicable export duty.
29. Enhancement of FPS rate to 2%, would also significantly benefit the leather sector.

30. Minimum value addition under advance authorisation scheme for export of tea has been
reduced from the existing 100% to 50%.
31. DTA sale limit of instant tea by EOU units has been increased from the existing 30% to
32. Export of tea has been covered under VKGUY Scheme benefits. 14

Pharmaceutical Sector
33. Export Obligation Period for advance authorizations issued with 6-APA as input has been
increased from the existing 6 months to 36 months, as is available for other products.

34. Pharma sector extensively covered under MLFPS for countries in Africa and Latin
America; some countries in Oceania and Far East.

Handloom Sector
35. To simplify claims under FPS, requirement of Handloom Mark for availing benefits
under FPS has been removed.

36. EOUs have been allowed to sell products manufactured by them in DTA upto a limit of
90% instead of existing 75%, without changing the criteria of similar goods, within the
overall entitlement of 50% for DTA sale.
37. To provide clarity to the customs field formations, DOR shall issue a clarification to
enable procurement of spares beyond 5% by granite sector EOUs.
38. EOUs will now be allowed to procure finished goods for consolidation along with their
manufactured goods, subject to certain safeguards.
39. During this period of downturn, Board of Approvals (BOA) to consider, extension of
block period by one year for calculation of Net Foreign Exchange earning of EOUs.15
40. EOUs will now be allowed CENVAT Credit facility for the component of SAD and
Education Cess on DTA sale.

Thrust to Value Added Manufacturing
41. To encourage Value Added Manufactured export, a minimum 15% value addition on
imported inputs under Advance Authorization Scheme has now been prescribed.
42. Coverage of Project Exports and a large number of manufactured goods under FPS and

43. DEPB rate shall also include factoring of custom duty component on fuel where fuel is
allowed as a consumable in Standard Input-Output Norms.

Flexibility provided to exporters
44. Payment of customs duty for Export Obligation (EO) shortfall under Advance
Authorisation / DFIA / EPCG Authorisation has been allowed by way of debit of Duty
Credit scrips. Earlier the payment was allowed in cash only.

45. Import of restricted items, as replenishment, shall now be allowed against transferred
DFIAs, in line with the erstwhile DFRC scheme.
46. Time limit of 60 days for re-import of exported gems and jewellery items, for
participation in exhibitions has beenextended to 90 days in case of USA. 16
47. Transit loss claims received from private approved insurance companies in India will now
be allowed for the purpose of EO fulfillment under Export Promotion schemes. At present,
the facility has been limited to public sector general insurance companies only.

Waiver of Incentives Recovery, On RBI Specific Write off
48. In cases, where RBI specifically writes off the export proceeds realization, the incentives
under the FTP shall now not be recovered from the exporters subject to certain conditions.

Simplification of Procedures
49. To facilitate duty free import of samples by exporters, number of samples/pieces has been
increased from the existing 15 to 50. Customs clearance of such samples shall be based on
declarations given by the importers with regard to the limit of value and quantity of samples.
50. To allow exemption for up to two stages from payment of excise duty in lieu of refund, in
case of supply to an advance authorisation holder (against invalidation letter) by the domestic
intermediate manufacturer. It would allow exemption for supplies made to a manufacturer, if
such manufacturer in turn supplies the products to an ultimate exporter. At present,
exemption is allowed upto one stage only.
51. Greater flexibility has been permitted to allow conversion of Shipping Bills from one
Export Promotion scheme to other scheme. Customs shall now permit this conversion within
three months, instead of the present limited periodof only one month.
52. To reduce transaction costs, dispatch of imported goods directly from the Port to the site
has been allowed under Advance Authorisation scheme for deemed supplies. At present, the
duty free imported goods could be taken only to the manufacturing unit of the authorisation
holder or its supporting manufacturer.
53. Disposal of manufacturing wastes / scrap will now be allowed after payment of applicable
excise duty, even before fulfillment of export obligation under Advance Authorisation and
EPCG Scheme.
54. Regional Authorities have now been authorised to issue licences for import of sports
weapons by renowned shooters, on the basis of NOC from the Ministry of Sports & Youth
Affairs. Now there will be no need to approach DGFT(Hqrs.) in such cases.

55. The procedure for issue of Free Sale Certificate has been simplified and the validity of the
Certificate has been increased from 1 year to 2 years. This will solve the problems faced by
the medical devices industry.
56. Automobile industry, having their own R&D establishment, would be allowed free import
of reference fuels (petrol and diesel), upto a maximum of 5 KL per annum, which are not
manufactured in India.
57. Acceding to the demand of trade & industry, the application and redemption forms under
EPCG scheme have been simplified.

Reduction of Transaction Costs
58. No fee shall now be charged for grant of incentives under the Schemes in Chapter 3 of
FTP. Further, for all other Authorisations/ licence applications, maximum applicable fee is
being reduced to Rs. 100,000 from the existing Rs 1,50,000 (for manual applications) and Rs.
50,000 from the existing Rs.75,000 (for EDI applications).
59. To further EDI initiatives, Export Promotion Councils/ Commodity Boards have been
advised to issue RCMC through a web based online system. It is expected that
issuance of RCMC would become EDI enabled before the end of 2009.
60. Electronic Message Exchange between Customs and DGFT in respect of incentive
schemes under Chapter 3 will become operational by 31.12.2009. This will obviate
the need for verification of scrips by Customs facilitating faster clearances.
61. For EDI ports, with effect from December 09, double verification of shipping bills by
customs for any of the DGFT schemes shall be dispensed with.
62. In cases, where the earlier authorization has been cancelled and a new authorization has
been issued in lieu of the earlier authorization, application fee paid already for the cancelled
authorisation will now be adjusted against the application fee for the new authorisation
subject to payment of minimum fee of Rs. 200.
63. An Inter Ministerial Committee will be formed to redress/ resolve problems/issues of
64. An updated compilation of Standard Input Output Norms (SION) and ITC (HS)
Classification of Export and ImportItems has been published.

Directorate of Trade Remedy Measures
65. To enable support to Indian industry and exporters, especially the MSMEs, in availing
their rights through trade remedy instruments, a Directorate of Trade Remedy Measures shall
be set up.

With a view to doubling our percentage share of global trade within 5 years and expanding
employment opportunities, especially in semi urban and rural areas, certain special focus
initiatives have been identified for the agriculture, handlooms, handicraft, gems & jewellery
and leather sectors. Government of India shall make concerted efforts to promote exports in
these sectors by specific sectoral strategies that shall be notified from time to time.
Further Sectoral Initiatives in other sectors will also be announced from time to time.
For the present, the thrust sectors indicated below shall be extended the following facilities:-

Indian Exim Policy
Home - Export Import Guide - Indian Exim Policy

In every five years, the Ministry of Commerce and Industry, Government of India, announces
the Export-Import (EXIM) policy. This is an effort towards the encouragement of foreign
trade and creation of a complimentary Balance of Payments. The EXIM policy, updated
yearly on 31st of March, is followed from 1st April.

Some of the chief highlights of the current policy are:
1. Extension of the DEPB scheme till May, the next year.
2. Service tax will be refunded on maximum services
3. Extending Income tax benefit for EOUs.
4. Extension of FMS coverage and inclusion of ten more countries including
Mongolia, Croatia, Ghana, Colombia, Albania, etc.
5. Introduction of split-up facility
6. Payment of excise duty by export oriented units on monthly basis rather than
consignment basis.
However, the central government reserves the right to amend any of the sections of
this policy in public interest.

Some of the focus initiatives of the policy are:
To have a greater share in the global trade and generate more employment opportunities, a
number of focus initiatives that have been identified for various sectors are:

Some of the policies that have been introduced are-Vishesh Krishi and Gram Udyog Yojana.
Moreover, diverse export promotion schemes have allowed the use of export of certain
restricted items. Import of certain pesticides has been approved under the advance
authorization schemes for export of agricultural products.

MAI/MDA schemes have granted specific plans for the promotion of export of handloom
items. Duty free import on certain items has been conferred which has proved to be
beneficiary. These include hand knotted carpets.

Establishment of new handicraft SEZs would enable the procurement of products from the
cottage sector and also help in the finishing for exports. It is also suggested that the import
entitlement of machineries, tools, trimmings and equipments will be 5% of the value of FOB
for export that was recorded the previous year. Import trimmings, consumables and
embellishments are under the authorization of handicraft EPC.

Gems and Jewellery:
The replenishment scheme holds the authority to allow the import of 8K or above gold
backed up by an Assay certificate for the specification of weight, alloy content and purity.
Several import duties have been revised for jewellery, cut and polished diamonds, marine
sector, electronics, leather and footwear, etc.
The major points of Exim Policy India is discussed as hereunder for each and every export
sectors and schemes

Duty free import facility for service sector having a minimum foreign exchange earning
of Rs.10 lakhs.

The duty free entitlement shall be 10% of the average foreign exchange earned in the
preceding 3 licensing years.

Corporate sector with proven credential will be encouraged to sponsor Agri Export Zone
and to provide services such as provision of pre/post harvest treatment and operations, plant
protection, processing, packaging, storage and related R&D.

Status Holders
Duty-free import entitlement for status holders having incremental growth of more
than 25% in FOB value of exports.
It shall be 10% of the incremental growth in exports and can be used for import of
capital goods, office equipment and inputs.

Hardware & Software
To promote growth of exports in embedded software, hardware duty free import for
testing and development purposes allowed.
Hardware upto a value of US$ 10,000 shall be allowed to be disposed off. 100%
depreciation to be available for 3 years.

Gem & Jewelery Sector
Diamond & Jewelery Dollar Account for exporters dealing in purchase/
sale of diamonds and diamond studded jewelery.
Gem & Jewelery units in SEZ and EOUs can receive precious metal i.e
Gold/silver/platinum prior to exports or post exports equivalent to value of jewelery exported.

Export Clusters
Upgradation of infrastructure in existing clusters/industrial locations under the
Department of Industrial Policy & Promotion (DIPP) scheme to increased.

Rehabilitation of Sick Units
Steps for for revival of sick units and extension of export has been modified.

Removal of Quantitative Restrictions
Import of 69 items covering animal products, vegetables and spices, antibiotics and films
removed from restricted list.

Special Economic Zones
Sales from Domestic Tariff Area (DTA) to SEZs to be treated as export. Foreign
bound passengers will now be allowed to take goods from SEZs to promote trade, tourism
and exports.
Export/import of all products through post parcel/courier by SEZ units will now be
SEZ units will now be allowed to sell all products including gems and jewelery
through exhibitions and duty free shops or shops set up abroad.

EOU of Exim Policy India
Agriculture/Horticulture processing EOUs will now be allowed to provide inputs and
equipments to contract farmers in DTA.
Period of utilization of raw materials prescribed for EOUs increased from 1 year to 3
Export/import of all products through post parcel/courier by EOUs will now be
EOUs will now be allowed to sell all products including gems and jewelery through
exhibitions and duty free shops or shops set up abroad.

EPCG of Exim Policy India
Shall allow import of capital goods for pre-production and post-production facilities
To facilitate upgradation of existing plant and machinery, import of spares shall also
be allowed.
To facilitate diversification into the software sector.

DEPB of Exim Policy India
Facility for provisional DEPB rate introduced to encourage diversification and promote
export of new products.

DFRC of Exim Policy India
Duty Free Replenishment Certificate scheme extended to deemed exports to provide a boost
to domestic manufacturer. Value addition under DFRC scheme reduced from 33% to 25%.

Advance License
Standard Input Output Norms for 403 new products notified in Exim Policy India. Anti-
dumping and safeguard duty exemption to advance license for deemed exports for supplies to

Transaction Cost Reduction
Applications filed online shall have a 50% lower processing fee as compared to manual
applications is notified in Exim Policy India.
Other benefits extended by new Exim Policy India are -

Actual user condition for import of second hand capital goods upto 10 years old dispensed
Reduction in penal interest rate from 24% to 15% for all old cases of default under
Exim Policy.
Export of free of cost goods for export promotion @ 2% of average annual exports
in preceding sthree years subject to ceiling of Rs.5 lakh permitted.

This Annual Supplement is the second in the series supplementing the Foreign Trade Policy
2004-09. In line with Governments promise of a stable Foreign Trade Policy regime, this
years supplement (in the same way as last year) does not alter the broad contours of the main
Policy. However, recognizing the dynamic nature of international trade and the consequent
need for periodic realignment of our international trade strategies, contemporary issues have
to be addressed from time to time, and this is what this initiative does. The changes in the
Annual Supplement resulted from the inputs received through interactive sessions with
various Export Promotion Councils, Industry organizations, Apex Chambers of Commerce &
Industry and sister Departments of Government. The Board of Trade has emerged as an
effective institutional mechanism and idea-generator for the FTP. A number of useful inputs
have been obtained through the Working and Study Group reports and brain storming
sessions of the Board of Trade.

When the Government launched the new Foreign Trade Policy in August 2004, it set out with
the ambitious objective of doubling Indias percentage share of global merchandize trade
within five years. Merchandize trade in the very first year of the policy period grew at the rate
of 26%. This years export figures are unprecedented. I am delighted to share with you that
merchandize exports have crossed the magic figure of 100 billion dollars. In fact, they have
touched the auspicious figure of 101 billion dollars. The annual growth rate is 25%.
Market Information & Data.

Exports from many sectors have surpassed our expectations. Project goods exports grew at
the rate of 173%. Exports of non-ferrous metals, guar gum meal, computer software in
physical form, rice, pulses, dairy products, all recorded a growth surpassing 50%.
Commodities like man-made staple fibres, cosmetics and toiletries, iron-ore, coffee,
processed food and transport equipment grew at the rate above the average, i.e. more than
25% during this period.

India is steadily increasing its share in important markets. Growth in exports to UK has been
30%, to Singapore (with which we implemented the CECA)54%. Indias exports to South
Africa grew at 44% while for China the growth rate is 35%. We shall be releasing detailed
statistics on all this in the form of a Ready Reckoner next month, after exact figures come in.

The other chief objective of the Foreign Trade Policy was providing a thrust to employment
generation, particularly in semi-urban and rural areas. We are therefore introducing two new
schemes to nurture this. We realized that certain industrial products can generate large
employment per unit of investment compared to other products, and promoting their export
would in turn give a thrust to their manufacture. This realization led to the formulation of the
Focus Product Scheme which aims to promote such exports. The Scheme allows duty
credit facility at 2.5% of the FOB value of exports on fifty percent of the export turnover of
notified products, such as value added fish and leather products, stationery items, fireworks,
sports goods, and handloom & handicraft items. It is also necessary to penetrate markets,
especially to which our exports are comparatively low. Some of our competitors are
aggressively occupying space in Latin America, in Africa and other destinations which
Indian exporters have unfortunately been neglecting, perhaps due to high freight costs &
undeveloped networks. But these are the markets of the future, and it is of strategic necessity
that we enlarge our market share here.
For this we have a Focus Market Scheme which allows duty credit facility at 2.5% of the
FOB value of exports of all products to the notified countries. The scrip and the items
imported against it for both these schemes would be freely transferable. These two Schemes
would replace the Target Plus Scheme. To take the benefits of foreign trade further to rural
areas, the Vishesh Krishi Upaj Yojana is being expanded to include village industries based
products for export benefits, and it is therefore renamed as Vishesh Krishi Upaj aur Gram
Udyog Yojana a rather long name, but one which adequately reflects its intent and

While Services account for 52% of our GDP, our total services trade exports & imports
totals more than 100 billion dollars. Expansion of the Services sector is vital for providing

jobs to urban educated youth. In the WTO too we are actively engaged in the Services
negotiations. A number of features have been added in the Served from India Scheme to
encourage service exports. The Scheme ill now allow transfer of both the scrip and the
imported input to the Group Service Company, whereas earlier transfer of imported material
only was allowed.

Because of a rich tradition of craftsmanship, enterprise and availability of skilled, low cost
manpower India has the potential to become an international hub for Gems and Jewellery.
We have already introduced some measures in the Budget. The diamond trade, which was
concentrated in Antwerp, is moving out to Dubai, to Tel Aviv. I want Mumbai be right up
there, and not lose out to its fellow Asian cities. This Supplement now introduces a number of
measures for facilitating export of value added products catering to changing needs of the
market and facilitating easier product movement across the borders and allowing import of
precious metal scrap for refining.
(a) We have large unutilized melting, refining and jewellery-making production
capacity. To enable such capacities to be used in a productive manner, import of precious
metal scrap and used jewellery will now be allowed for melting, refining and re-export of
jewellery. However, such import will not be allowed through hand baggage.
(b) Gems & Jewellery exporters will now be allowed to re-import the rejected precious
metal jewellery subject to refund of duty exemption benefits on the inputs only and not the
duty on jewellery as was being done earlier.
(c) Many a times exporters faced the dilemma of unsold jewellery in the foreign
markets because of changing designs and other such factors. To overcome this problem,
Gems & Jewellery exporters will now, be allowed to export jewellery on consignment basis.
(d) Treatment of cut and polished precious and semi-precious stones enhance the quality
and afford higher value in the international market. For this purpose, Gems & Jewellery
exporters will now be allowed to export such items for treatment and subsequent re-import,
within a period of 120 days.
(e) Increase of gold and silver prices in the international market over the past few years
has made the present value addition norms on export of gold & silver jewellery unrealistic.
The value addition norm for such items is being reduced from 7% to 4.5%. Such measures
will help Indian Gems and Jewellery to sparkle on the world stage.

India is on the move, metaphorically as well as literally. We not only have the fastest growing
automobile market in the world, but India is fast emerging as an important centre for sourcing
auto-components. The FTP already extends a number of facilities for the sector. We shall
now allow import of new vehicles by auto component manufacturers for R & D purposes
without homologation. This is necessary to give our R&D labs easier access to the latest
technologies current in the auto component industry.

Supplies of stores (food, beverages and other supplies) and refueling of long distance flights
has emerged as a big business opportunity. Currently, most airlines replenish supplies or
refuel at Thailand, Malaysia or Singapore. Since these supplies were not treated as exports in
India and the suppliers could not obtain the duty neutralisation benefits available to other
export products the store supplies from India were not competitive enough. We have decided
to treat such supplies on an equal footing with other exports, qualifying for benefits under
various Export Promotion Schemes. This will hopefully enable India to offer competitive fuel
prices and will attract mid route stops of the international flights.

Having done something for the land and the air, we felt we must do something for the
sea too! We had already brought in some benefits for shrimp and tuna fishing through the
budget. Now the list of specialized inputs used in the marine sector has been expanded to
include additional items of chemicals and other additives within the present duty free
entitlement of 1%.

Few step for an enterprise to become an export organisation are:-
1) REGISTRATION AS A BUSINESS ENTITY:- A new export unit can be started by
registering as proprietorship, partnership or imited liability company.
2) IEC NUMBER - Any company wish to export/import need to obtain a Import Export
code(IEC) number. IEC is issued by Regional licensing authority of DGFT. For
communication with any office in regard to for export and import needs IEC number.
3) RCMC means the certificate of registration and membership granted by an Export
Promotion Council/ Commodity Board/ Development Authority or other competent authority

as prescribed by Foreign Trade Policy to an exporting unit.
Any person, applying for a licence/ authorisation/certificate/permission to import/ export or
any other benefit or concession under Foreign Trade Policy is required to furnish (RCMC). It
is also required for executing a bond before Central Excise authorities, which exempts
exporters to furnish bank guarantees.

Export Promotion Councils have been set up by various ministries of the Central Government
to promote and develop the exports of particular group of products, projects and services. For
certain group of products, which are sensitive from the viewpoint of national consumption,
there are commodity boards instead. Thus while we have export promotion councils for
apparel, leather, software, chemicals, engineering goods etc., India has commodity boards for
tea, coffee, jute etc.

4) REGISTRATION WITH SALES TAX OFFICE :-Exported goods from India are exempt
from central & state sales tax. However, for getting exemption of such taxes or claming their
refund, wherever permissible under Foreign Trade Policy, the exporting unit should be
registered with sales tax authorities.

5) REGISTRATION WITH EXCISE DEPT.:-If an exporting unit is engaged in
manufacturing of products, it needs registration with excise department & formalities remain
the same as for any domestic unit. This registration is required for claiming refund of excise
duties under various schemes of the government.

Research in general refers to the search of knowledge. One can also define research as a
scientific & systematic collection of information.
In simple words research is the careful investigation or enquiry of markets especially through
search for new facts in any branch of knowledge.
The methodology adopted for the project was as follows:
Direct Consultation: This includes direct interaction with staff of the organization regarding
the problems that I encountered during the research.
Data Collection: Data was mainly collected from the internal reports of the company and
gathering further information. I have also referred to the various secondary sources.

Research design is the conceptual blueprint for collection, measurement and analysis of data.
Research design stands for advance planning of the methods to the adopted for collecting the
relevant data and the techniques to be used in their analysis keeping in view the objectives of
the research and the availability of staff, time and money. Two broad classes of research
design are identified as:
In case of exploratory research studies.
In case of descriptive in case of research studies.
The research design used in the project report is descriptive research design. A Descriptive
research design is a scientific method which involves observing and describing the behaviour
of a subject without influencing it in any way.
Research: Descriptive
Research Technique: Qualitative & Quantitative
Tools Used: E-mail & Telephonic
Data Source: Primary & Secondary

Data collection is the basic step and of importance on which authenticity of study depends.
Before going for the study the researcher have to collect the appropriate data required for the
study. Source of allocation of data are two types.
1. Primary Data
Handouts given by the company guide
2. Secondary Data
Packaging List
Shipping Bill
Files maintained by the departments
Books and Journals
The sample size for the study was 100.
The main objective of the study of the EXIM POLICY.
To know about export import process.
To get the first hand experience in the field of manufacturing unit.
To study the transportation cost associated with different modes.
To know the requirement of the customer.
To analyse the current situation of export products.
To determine the total cost expensed on a single product.

This project is all about to know about EXIM POLICY required for export. This project puts
more focus on to know custom clearness, to make export invoice, to get shipping bill number
from custom department etc.

The scope of study pertains to the following:
The study comprises the understanding of EXIM POLICY at REED & PICK IMPEX PVT.
The survey consists of 100 respondents who are asked general questions relating to
export activities
The study helped to get an insight about the awareness of export activities among the

Q1: Nature of your company.
Table no. 4.1

Figure no. 4.1

Of the total, 40% employees believe the primary business of the Company is Manufacturing.
However, 30% and 20% believe it as trading and multinational company, respectively.

Nature of Business
Trading Company
Multinational Company
S.No. Options No. of Respondents
1. Manufacturing
2. Trading Company
3. Multinational Company

Q2: Extent of foreign ownership of your company

Table no. 4.2

Figure no. 4.2

Interpretation: Majority of the respondents agreed that there is no foreign ownership in the

0% Less than or
equal to 50%
More than 50%
Foreign Ownership
No. of Respondents
S.No. Options No. of Respondents
1. No foreign ownership
2. Foreign partner(s) have less than or equal to
50% ownership
3. Foreign partner(s) have more than 50%

Q3: Number of year of operation
Table no. 4.3

Figure no. 4.3

Interpretation: Majority of the respondents know that the Company is operating since

Year of Operation
More than 40 years
Less than 40 years
Cant specify exactly
S.No. Options No. of Respondents
1. More than 40 years
2. Less than 40 years
3. Cant specify exactly

Q4: Presence of the Company in major international retail chain stores

Table no. 4.4

Figure no. 4.4

Interpretation: The survey proves that the Company occupies prominent shelf space of
major retail chains.

Yes No
Presence in Retail Chains
No. of Respondents
S.No. Options No. of Respondents
1. Yes
2. No

Q5: Awareness about international norms that are applicable for the Companys products

Table no. 4.5

Figure no. 4.5

Interpretation: 85% of the respondents are aware of the fact that international norms are
applicable on the Companys products.

Yes No
Application of International Norms
No. of Respondents
S.No. Options No. of Respondents
1. Yes
2. No

Q6: Information about the changed or new regulation schemes for exports
Table no. 4.6

Figure no. 4.6

Interpretation: Majority of respondents believe that domestic sources of information
provide all information related to changed or new schemes.

By Domestic Information
By Foreign Information
Information About Changing Norms
No. of Respondents
S.No. Options No. of Respondents
1. By domestic information sources
2. By foreign/international information sources

Q7: Mode of transport the Company uses the most
Table no. 4.7

Figure no. 4.7

Interpretation: Most of the respondents observed that the Company uses road to transport
majority of its products.

Road, 60
Ocean, 30
Rail, 10
Mode of Transport
S.No. Options No. of Respondents
1. Road
2. Ocean
3. Rail

Q8:Interest of employees in attending seminars on export?
Table no. 4.8

Figure no. 4.8

Interpretation: Only 65% of the respondents have shown interest in attending seminars
related to exports.

Interested in Seminars
S.No. Options No. of Respondents
1. Yes
2. No

Q9: The level of exporting activity for the Company
Table no. 4.9

Figure no. 4.9

Interpretation: Majority of the respondents believe that the Company exports about 50% of
its products.

Exports 50% of
Exports some of
the products
Does't export at
Level of Export Activity
No. of Respondents
S.No. Options No. of Respondents
1. 50% or more of products are exported
2. Some of the product(s) are exported, but the
Company is interested in exporting a higher
3. Company is currently not exporting, but has
interest in doing so in future


Lack of Experience:I was new on the topic which was assigned to me. So lack of
experience in getting information from respondents came in to the way of
collecting the relevant data.
Time: Time was a bit short to fathom into the depth of the study. But still all
efforts to the best possible extent have been made to collect the data.
Data Collection Constraints:Since most of the data used is secondary in nature,
this poses the constraints on the validity and reliability of the data.
Busy Employees:Employees are not available as are busy in their work
Appointments:There was a problem in taking appointments from the managers.
Sources: Sources were confounded some time to give proper information.
Area: The office area was very congested.

As per the rule, Govt. of India, Ministry of Commerce and industry announce EXIM
Policy after every five year which updated every year on 31
March and become effective
from 1
april of every year.
In respect of that,when the previous foreign trade policy made with to achieve the
certain objective as developing exports potential, promoting FDI, improving foreign trade
and export performance and creating favourable BOP.,which moreover achieved in recent
time. All the sector enjoyed the policy in terms of growth and market expansion.
So, now in this year i.e 2009-2014,a new foreign trade policy have amended with the
objective of doubling indias percentage share of global of merchandize trade within years
along with previous at all. So, for that so many diversification have done or implementing the
new one for diff. sector viz. marine sector,jems and jewellery sector, leather ,agriculture
sector ,service sector ,tea,pharmaceutical,hardware and software,which will helpful for the
Indian economy growth. No doubt that EXIM is one of the major factor for the economy
development. It allows to Indian economy to grow in compare of other countries by
promoting various facilities which are really inevitable . it allows for the Technological up
gradation ,which in turn improve quality, productivity and reduce cost which ultimately
increase the GDP,GNP,AND N.I Growth rate. Now in current scenario INDIA is staidly
increasing its share in important market. Its addressed Growth in exports to UK has been
30%, to Singapore (with which we implemented the CECA)54%. Indias exports to South
Africa grew at 44% while for China the growth rate is 35%.
Above all indication are good for the economic growth and are the milestone for the

The various sector in INDIA are growing day by day and expanding their smarket viz.
IT sector,automobile sector,telecom sector, marine sector, jems and jewellery sector, leather ,
service sector , tea, pharmaceutical, hardware and software are growing r except farm or
agriculture sector in recent era. There can be so many factor for it but among all one of the
major factor is EXIM Policy which are playing a important role to expanding market at a
global international level. EXIM policy allows and promoting the exports of various goods
and services at a specific duty which generate revenue and promote import some specific
goods and technology at a zero duty which help economy to grow and also generate
Government plays a important role in all, as if we see the earlier era in between 1960s to
1980s there was restriction for the foreign company to enterd into the indian market but after
1980s the indian government allowed the foreign company to enter into the indian market
with the joint ventures to promote the different sector in india which was really needful. Why
I m talking about,because it is giving the clear view to existanceof the ECONOMIC
GLOBALIZATION in india which finally shows the integration of national economy into the
international economy through trade,foreign direct investment(FDI),capital
flow,migration,immigration and the spread of technology. It can be measure in terms of good
and services(e.g exports and imports as a propotion of national income) ,labour/people(eg.
Net migration rates) and capital(inward and outward direct investment). It proves the
industrial revolution as well as technological revolution in great extend. Government also
helped them by introduced to the ECONOMIC LIBRALIZATION in this growing golbal
competition in modern era. So,it seems to growth in the GDP which is now 9% and in
particular manner it seems 20% in industry,62.6% in services but only 17.5% in agriculture.
It can also seems exports and imports of goods are in favourable manner which are growing
day by day. Exprots in terms of software petorleum products,textile goods,gems and
jewelry,engineering goods,chemicals etc. and Imports in terms of crude
oil,machinery,fertilizer,chemicals etc. and due to all indan economy is in growing condition
in this changing scnaerio. It touched the indian economy in great manner that in turn proof
that in recent scenario india has became a manufacturing hub over other BRIC countries.
But question is that why the government does not doing much more for removal of
regional imbalances,regional inequilities and wealth inequilities and the diversification which
are needed much more in farm sector? To promot the sector is really one of the best factor to

be developed,contrary it is aso indispensable to remove the regional imbalances which can be
major drawback , which are prevent india to be developed nation in the great extend.
So for that capital controls in terms of inflow and outflow should be controlled and also there
should be the proper finance. . Incidentally, the capital of New York state is not New york
city but the small town of Albany. That is the kind of distribution that india needs badly.
With will power ,that kind of redistribution can be achieved.


C Ramagopal, Export Import Procedures, New Age International publication.
Export And Import Production Analysis, 4
edition,2004, Abhinav Publishing House
Pvt. Ltd, New Delhi
Thomas E. Johnson, Export/Import Procedures, 3
addition, 1997, Amacom
Rathore, B.S., Export Marketing Himalaya Publishing House.

Books on Research Methodology:.
Cooper &swindler, Business Research Methods, TMH, 6
Kothari, C.R. Research Methodology, 3
edition, 1997, Vikas Publishing House Pvt.
Ltd, New DelhiResearch Methods in Management by Geoff Lancaster

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